(Reuters) -Canadian telecoms company Telus Corp and investment firm Globalive Capital Inc have entered into a spectrum and network sharing agreement to bid for Shaw Communications Inc's wireless business, the companies said on Thursday.
The agreement is conditional on Globalive's successful acquisition of Freedom mobile and does not involve financial investment from Telus. The sale of Shaw's wireless business, Freedom Mobile Inc, to a credible bidder is seen critical for Rogers Communications' to clinch its C$20 billion ($15.6 billion) bid for Shaw.
Canada's antitrust agency has blocked Rogers' deal to buy Calgary-based Shaw on the grounds it would reduce competition in the wireless industry.
The bureau also rejected the prospective buyers presented by Rogers-Shaw to sell Freedom Mobile on the grounds that the buyers will not be competitive.
But a federal government source told Reuters last week, Montreal-based telecoms and media company Quebecor Inc is a credible buyer for Freedom Mobile.
"Telus and we believe that we are a strong remedy partner for Rogers to get the Shaw merger approved," Globalive Chairman Anthony Lacavera told Reuters, adding that the pact presents a viable permanent fourth carrier in Canada, which has some of the some of the world's steepest wireless rates.
Lacavera was the founder and chief executive of Wind Mobile, which was renamed Freedom Mobile after it was sold to Shaw in 2015.
Richard Gilhooley, Director of Public Affair for Telus, said the agreement will allow Globalive to expand its network reach and coverage if they are the successful remedy partner for Freedom Mobile.
Globalive has tied up with hedge fund Baupost and Twin Capital for the funding, Lacavera said.
Globalive's C$3.75 billion ($2.94 billion) cash offer for Freedom in March 2021 was rejected by Rogers, Lacavera said.
Rogers is in talks with Quebecor, Manitoba-based Xplorenet and Vancouver-based Aquiline Family to sell Freedom, people familiar with the matter told Reuters.
A Rogers spokesperson declined to comment on these developments. Sources declined to be identified as the discussions are confidential.
($1 = 1.2805 Canadian dollars)
(Reporting by Tiyashi Datta in Bengaluru; Editing by Krishna Chandra Eluri and Marguerita Choy)